Smartest Ways to Invest Your Money

by Travis Ames, Demand Media

As a young couple, now is the time to invest and save for the future. Since you are young, you have a bit more leeway in going forth and experimenting with different modes of investing. But there is a fine line between being aggressive and reckless. Know what you are doing through either your own research or through hiring a financial advisor to help with your investments. With a series of successful investments, you and your partner will find yourselves well on the road to financial stability.

Make a Financial Plan

This may seem elementary, but it is imperative to have a goal and a plan for your finances. When building for your future, think of it the same way as building towards your career. You start out small, have to learn the rope and occasionally make a mistake or two, but eventually you and your partner will learn through those mistakes.

A key component to making your plan is meeting with a financial advisor. Be sure to properly look into which financial planner or company fit your needs as a couple best. You don’t’ want to find yourself in a situation where you are being led down a path that is not right for you or your partner.

Invest in Stocks

Stocks are a crucial cog in the machine that is your financial future. As a young couple, the conventional wisdom is that you can be a little more daring, though in a stale economy, it may be best to move slow and cautious if you are uncertain as to what you should invest in. The key here is diversifying your stock portfolio. Go for a couple of the big ticket items such as Apple or Wal-Mart, but don’t be afraid to dig a little deeper for a potential high earner. Again, diversification is the key to your success, so be sure to purchase stocks in a variety of industrials as well as stocks in companies both foreign and domestic.

Putting Your Money in a 401(k)

Even though retirement may seem far down the line, it is imperative to begin saving for it. A 401(k) allows you a maximum of $14,000 a year, which at a 7 percent yield will bring in excellent results by the time you are ready to retire. No matter how expansive your 401(k) gets, resist the urge to tap into it early. Let it ride until it is finally time to settle down and invest.

Savings

From a high yield savings account to mutual funds, there are a variety of ways to save for a rainy day. Anything that you can spare should be put away, whether it be the money between your cushions or your Christmas bonus. Set aside a date each month to put add to certain savings accounts. Doing so will ensure that you are continually adding to your savings and not going out and spending that same amount.

Clean Your Financial House on an Annual Basis

Set aside a time during the year when you go through your investments to clean out the ones that are not doing so well, while bringing in new investments to further diversify your portfolio. You can do this with stocks by cleaning out underperforming stocks while selling high on stocks that are doing well. Use this money to reinvest in the stock market or into new mutual funds. Be sure to consult your financial advisor on the best course of action.

References

About the Author

Travis Ames has written for numerous publications since 2007 and has been writing instructional articles online since 2010. His areas of expertise are wide and include travel, politics, arts and entertainment, technology and finance. He currently lives in Portland, Oregon where he will begin teaching in the fall of 2011.